Salary/ Income Protection Insurance Donegal

Well, you can Click here to get Wikipedia’s definition.

Income Protection Insurance is an policy designed to pay out a regular income if you are unable to work due to an accident, or sickness. The pay-out will enable you continue to meet your essential household costs. For example, your mortgage/rent, utilities and to put food on the table, until you are able to return to work.
Income Protection is also commonly known as Salary Protection or wage protection!
Ultimate, all of these names are just another name for income protection insurance.

How much does an income protection insurance policy cost?

The cost of an income protection insurance policy will vary depending on a few factors. These factors are…

• Your age
• Your occupation
• Smoker or not
• If you have any pre-existing medical conditions
• The amount of Income you want to protect
• What defer period you would like on your policy

To give you an indication, you can use this Aviva calculator below. I would recommend speaking with a trusted advisor though to make use you put in place the correct cover for you. There are lots of terms and conditions with this type of cover, so, do seek advice before putting the cover in place

Income Protection Insurance Calculator – Aviva Broker

The cost of an income protection insurance policy will vary depending on a few factors. These factors are…

• Your age
• Your occupation
• Smoker or not
• If you have any pre-existing medical conditions
• The amount of Income you want to protect
• What defer period you would like on your policy

To give you an indication, you can use this Aviva calculator below. I would recommend speaking with a trusted advisor though to make use you put in place the correct cover for you. There are lots of terms and conditions with this type of cover, so, do seek advice before putting the cover in place

Income Protection Insurance Calculator – Aviva Broker

This is the waiting period until the Salary Protection Insurance income kicks in. The longer the deferred period, the cheaper your premium will be.

You can choose a deferred period of 4, 8, 13, 26, or 52 weeks – and yes, you choose it yourself. Before choosing, think about how long you and your family could realistically survive financially without your income and let that be your guide.

4 or 8 weeks is probably grand for most people, but after that it’d start to get a bit hairy.

Other factors to consider when choosing your deferred period are what other saving/investments do you have in place that can be utilised.

Income Protection Insurance pays out once your claim has been accepted by the insurance company, so it usually happens fairly fast. But remember, the payment only starts after your chosen deferral period.

Yes, but you can claim the tax back.

The pay-out is taxed in the same way as your normal income. The good news is though you get full tax relief on your premiums on your marginal rate. So, a higher rate taxpayer will get 40% tax relief of the cost of Salary Protection Insurance. For example, if you were paying €100 per month for your protection the cost is really only paying €60 per month after tax relief.

Fore on the tax relief click here: Permanent Health Benefit contributions (revenue.ie)

You can get tax relief on your income protection insurance premium at your marginal (highest) rate of tax, up to a yearly limit of 10% of your total income. This can make your premium more affordable but remember your benefit may be taxable if you make a claim. If you have an individual policy, your insurance company will give you a statement showing the premiums paid. To claim your tax relief, you need to include this information with your tax return. If you are a member of a group scheme, your employer usually takes your premium from your salary before tax. In this instance you would not qualify for tax relief.

We would have to say, yes, of course it is.
Your health is the most valuable asset you have and being in good health allows you to earn your income. Which in turn allows you to pay for things like you mortgage your car, put food on the table, and provide for your loved ones, I am sure you get the picture.
You’d be in bother without your income.

So, for the sake of a few euro a month, yes is it well worth it.
When you have a health crisis the last thing you need are financial concerns as well.

That is of course unless you are already financially free and don’t have to work for a living. In that case, congrats, and you don’t need Salary Protection.

The mean of Financially Fee: The Real Meaning Of Financial Freedom (forbes.com)

Insurers classify your occupation according to the risk of injury in your job. For example, a Financial Broker, like me, is a class 1 (lowest risk) whereas a plumber is a class 4 (highest risk). The higher the risk, the higher your premium. Some occupations will not get his cover at all. Check with you advisor as to what class your occupation falls into.

Currently there are 4 providers in Ireland providing this type of cover.

• Irish Life
• New Ireland
• Royal London
• Aviva

When it comes to the best provider for you, it will depend on a couple of factors

• The occupation class are you in with the providers. Some occupations may be a class 2 with one provider but class 3 with another. Obviously, this has implications on the price you pay.
• Underwriting, meaning is one provider going to apply a loading or an exclusion where anther provider is not

When it comes to the best provided in general.
If all providers are offering the same price etc, then we would consider Aviva to the best provider. They’ve won the Best Income Protection Product Award for the last seven years in a row; they pay more claims and they have been doing it the longest. According to Aviva, around 90 percent of their claimants would recommend them so they’re obviously doing something right.

And…it’s who my policy is with. And unfortunately, I have had to claim on mine but fortunately I had it to claim on.

Yes. You can cover up to 75% of your salary to a maximum benefit amount of €262,500 when you’re off work due to illness or injury – (less any social welfare payments) either until you return to work or your chosen retirement date if you’re not fit to return to work before then.

Yes, you can. You can choose from 4, 8, 13, 26 or 52 weeks.
For many people, their employer will pay them for a period of time. It’s after that, you need the cover most. For example: if your employer will pay you for a six-month period while you are unable to work then you should choose your start date (also known as deferred period) as 26 weeks.

You can claim as many times as you need to over the term of your plan. Should you be in claim and go back to work but relapse within 6 months your benefit will immediately restart.

When setting up your plan you can choose to keep the same premium and same income throughout your plan or increase both your premium and your benefit each year by selecting the indexation option. It is important to review your plan at least annually.

When setting up your plan you can choose to have this option included. If selected your benefit, should you be in claim, will increase each year. We would always recommend including this valuable option.

To work out how much income protection insurance you need, you should ask yourself these questions about what would happen if you’re unable to work due to illness or injury.

Five steps to creating your own income protection plan

You can claim the relief during the year by following these steps:

• sign into myAccount on revenue
• click on the ‘Manage your tax’ link in PAYE Services
• select ‘Claim tax credits’
• select ‘Health’ and ‘Income Continuance’.
• To claim the relief for a prior year, follow these steps:

Previous years:

• sign in to myAccount
• click on ‘Review your tax’ link in PAYE Services
• select the ‘Income Tax Return’ for the year you wish to claim for
• in the Tax Credit & Reliefs’ page select ‘Health’ and ‘Income Continuance’
• complete and submit the form